Goldman Upgrades Comerica To Neutral; Restructuring Uncertain, M&A Deal Best Route

Nash stated, "CMA has failed to earn its cost of capital" since 2010, but recently the company's decision to hire a consulting firm to explore "strategic alternatives" has the analyst positive on the company.

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In addition to opportunities to improve returns, the company is open to strategic alternatives as well. Major restructuring of the company could raise its return on equity to 10 percent. In a potential M&A deal, Comerica could gain a valuation of $60–$70. The "potential for strategic actions will likely provide downside protection to shares," Nash noted.

Organic Plan

Restructuring would increase returns from 7 percent to 10 percent with expense and revenue initiates and capital optimization. If properly done it could push valuation to $57.

Strategic Plan

With Comerica's history and recent metrics, CMA could "achieve a $60–$70 valuation in a sale," Nash said.